New NC Medicaid system finally getting turned on

Ten years after the first contract was awarded to replace North Carolina's outdated Medicaid billing network, a computer claims processing system is finally poised to go online.

Following a false start, cost overruns and criticisms, the $484 million project called NCTracks will begin accepting bills and treatment requests Monday from hospitals, doctors and other Medicaid service providers.

But one question remains: How will it work?

"We won't know until the rubber meets the road," said John Gibbons, case management director for Raleigh-based RHA Howell, which provides Medicaid-funded services for more than 400 children and adults with chronic medical conditions.

The Department of Health and Human Services, which runs North Carolina's Medicaid program, said it's done what it can to prepare for a smooth transition from the outgoing system first turned on in 1977. It's held training for billing workers and run more than 1 million invoices through the network. Help desks also will be beefed up in anticipation of questions.

Joe Cooper, the department's new chief information officer, acknowledges there will be some hitches, like any project of this size. But he believes the agency and the outside vendor who built the system are prepared.

"We will absolutely have issues in the first few weeks," Cooper said, but "we built this solution to meet the needs of our providers, and it's extensively tested to do this."

Republican Gov. Pat McCrory's administration has said repeatedly since taking office in January that past project problems weren't of its own doing. It's blamed Democratic predecessors who shepherded the project through one failed contract and then to Computer Sciences Corp., which will also run the new billing system.

"We've actually got three different scenarios planned for one where it doesn't work at all, one where part of it works and one where it all works," McCrory said last week in an interview. The scenarios are needed, he added, "because we inherited that program."

A lot is riding politically on a successful launch of the system, designed to process about 88 million claims annually valued at $12 billion from more than 70,000 providers. A smooth transition gives McCrory credibility as a problem fixer. Extensive delays in turning around invoices into payments will lead to finger pointing.

"First and foremost, if we can process claims and pay checks, we're probably 90 percent of the way on the right foot," said Sen. Jeff Tarte, R-Mecklenburg, who's built similar computer billing systems for hospitals and health companies. "That's going to be the big litmus test because it's like anything else — if you don't get paid, everybody's going to be screaming."

NCTracks is supposed to modernize how health care entities get paid from Medicaid, the federal-state health insurance program for 1.6 million residents, mainly poor children and older adults and people with disabilities. The program is advertised as streamlining how providers receive reimbursements by billing multiple agencies at once, leading to government cost savings over time.

Lindsay Hunt, manager for a Bryson City company that helps doctors and dentists bill for clients, helped test the new system, which moves dozens of forms online. He said getting prior approval for treatment and payments should be much quicker and easier: "It pretty much cuts out paper."

A May report from State Auditor Beth Wood's office found hundreds of critical tests for the system either failed or hadn't been performed. HHS said at the time that many problems cited had been addressed.

Still, the North Carolina Hospital Association said it has "not seen a contingency plan regarding how the state will deal with the testing issues and continue to pay hospitals," spokesman Don Dalton said. The North Carolina Medical Society, representing 70 percent of the state's practicing physicians, has created a web page where doctors can log in complaints.

"While we hope for a smooth transition, in a project of this magnitude, glitches are bound to occur," society CEO Bob Seligson said.

The department first sought in 2003 bids for a replacement system to the one run by the predecessor to outgoing vendor HP Enterprise Services. The state awarded a contract to Affiliated Computer Systems, but the state cancelled it a couple of years later.

Computer Sciences won the new contract in 2008. Initially expected to cost $265 million and go online in August 2011, the project nearly doubled in price and its start date was pushed back two years. Delays were attributed to changing Medicaid mandates and Computer Sciences overestimating how much code it could use from a New York project. The federal government pays 90 percent of the cost for building the system.

Fewer than 20 percent of the state's providers have completed voluntary training on the project. But HHS spokesman Ricky Diaz said nearly all of the top outfits that provide third-party billing — and turn in the majority of claims — are certified to use the system.

Officials said it will take a few weeks before the system's initial effectiveness can be evaluated.

HHS Secretary Aldona Wos and Cooper wrote last week in a newspaper column "it is important to set realistic expectations about what is going to happen as we transition to the new system."